Chicago Cubs tax issues caution buyers, MLB

From the Chicago Tribune: "The Chicago-based media company (Tribune) is proposing a tax-avoidance strategy that likely would require a buyer to borrow heavily to pay for the team.

• That highly leveraged financial structure has produced concern among prospective buyers about their ability to operate the Cubs in a competitive manner, according to multiple sources.

In addition, Major League Baseball is nervous about any of its teams being saddled with too much debt....

• Tribune Co., which also owns this newspaper, has had a running dialogue with league officials and is sensitive to their concerns, said a source close to the transaction. But the company also knows that this is a once-in-a-lifetime opportunity to buy one of sports' iconic franchises and expects bidders to come up with creative solutions to satisfy both Tribune and the league....

The league had concerns in News Corp.'s 2004 sale of the Los Angeles Dodgers to Boston businessman Frank McCourt, according to published reports.

• Originally, McCourt proposed financing the entire $430 million price with debt, worrying league officials that he might not have enough cash to invest in new players.

• But after several meetings with baseball officials, News Corp. retained a small equity stake."

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